• 09
  • May
    2011

When the Fair Debt Collection Practices Act was written in the late 1970s, social media websites like Facebook, LinkedIn and Twitter were not on the horizon and could not have been easily foreseen by the lawmakers who drafted the FDCPA.

Presently, many debt collection agencies are using the information consumers post about themselves on the Internet. While all debt collection agencies are bound by the restrictions in the FDCPA, it is not immediately clear how a law written before the advent of the Internet applies to social media websites. With concerns about how the FDCPA applies in the context of social media websites, the Federal Trade Commission recently organized a panel discussion on how social media should be used by debt collectors.

The panel included representatives from the collections industry, collections lawyers, and consumer protection advocates. The panel's purpose was to discuss whether social media can be used for gathering consumer information, for skip tracing (tracking the location of a debtor), and for communicating with a debtor.

The panel's consensus was clear when it came to using social media to gather information about a debtor. Panel members believed there is nothing wrong with gathering information that is publicly available on the internet because a consumer has not expectation of privacy in that information.

Concerning skip tracing, panel members expressed concern about the high potential for misidentification of debtors. The FDCPA is violated when a collection agency sends a collection notice or takes collection action against someone who does not owe money. With that in mind, collection agencies need to make sure they have a correct identification before trying to collect.

While the members of the FTC panel agreed that collecting information and skip tracing could be acceptable uses of social media websites, the panel was divided about using social media websites to make direct contact with debtors. The panel cautioned that it is very easy to cross a line and violate the anti-harassment provisions of the FDCPA on social media websites. Several panelists compared posting a comment on a debtor's wall to sending a postcard detailing information about a debtor's debts, which is not allowed under the FDCPA.

Source: Collections & Credit Risk, "The Debate Over Social Media In Collections Heats Up," Peter Lucas, 5/9/2011